Palm Oil: The oil of strife
by K P Prabhakaran Nair on 01 Oct 2021 5 Comments

During his Independence Day speech at the Red Fort, Prime Minister Narendra Modi announced that the Government of India is rolling out a scheme for the extensive cultivation of palm oil crop in India. Three days later, the Cabinet approved a Rs 11,040 core outlay over five years for the National Mission on Edible Oils-Oil Palm, based on the argument that India needs to reduce its dependence on the import of edible oils. This article examines the various aspects connected with this decision.  


There is nothing new about oil palm. As Jonathan Robins explains in his book, “Oil Palm: A Global History”, oil palm was cultivated in West African countries and reached global markets with the Atlantic slave trade five centuries ago. Slaves used it for much-needed nutrition and to ease the pain from bruises accumulated during the punishing sea journey. Slave traders used it to add a gloss to the skin of the slaves they were selling into bondage to command a higher price. As the oil’s efficacy was discovered by European nations, it transformed from a luxury product into a cheaper replacement for things such as tallow in soaps and as cooking oil.


Over time, the demand for palm oil outstripped production and the market demanded more production. This was difficult to achieve in Western Africa where the large palm oil trees tended to be scattered. But when the same trees were carried to Southeast Asia, in the tropical rainforests of what are now Malaysia and Indonesia, the colonial states found that the trees grew shorter. Since labour could be forced, overhead costs were low, and business boomed. It remained a staple crop for trade even after these countries became independent and palm oil plantations expanded as the World Bank advocated palm oil as a path to prosperity. 


Cornered market


According to the US Department of Agriculture, the world will produce approximately 75.5 million tonnes of palm oil in 2021, 58% of which is produced in Indonesia and 26% in Malaysia, the rest scattered among many countries, including India. Interestingly, no other country produces even 5% of the global supply.


Palm oil is very cheap and is found in everything from lipstick to ice cream. The main attraction of palm oil for Indians, on the whole, including Keralites, is its cheap price as a cooking oil. India is the world’s largest importer of palm oil, outstripping even China, Pakistan, Bangladesh, the European Union and the US. Over 90% of imported palm oil is used for cooking in India, which replaces all other edible oils used for cooking such as groundnut oil, sunflower oil, soybean oil, coconut oil and gingelly oil, among the main ones.


Palm oil use in India has increased almost ten-fold during the last 20 years; hence the huge import. And, it is to deal with this huge import bill that the central government is floating this new scheme. But, this is nothing new. The Agriculture Ministry launched the Oil Palm Improvement Programme in 1991-92. It has continued this in one form or another since then. The National Mission on Oilseeds and Oil Palm started in 2012, as part of the 12th Five Year Plan (2012-17), and identified two million hectares of cropland for growing oil palm.


In April 2017, the Ministry of Agriculture raised rates of support for planting, maintenance, intercropping, and bore wells for the promotion of oil palm cultivation. Many of the States identified under the scheme were from the northeast as well. Even the Andaman and Nicobar islands saw oil palm cultivation started by the Kerala State Government in the 1970s.


Zero Growth


What is worth noting, though, is that the area under cultivation of oil palm in the world has remained largely unchanged. According to the US Department of Agriculture (USDA), the area was 80,000 ha. in the market year 2012-13. It is projected to be 80,000 ha. even in 2021-23, confirming a zero growth in area under oil palm.


India ranks 17th in terms of production, at about 200, 000 tonnes production per annum, less than 0.5% of what Indonesia - the biggest producer of palm oil - produces. Will more subsidies make a real difference? Has oil palm cultivation benefited the Indian farmer? Has it benefited the Indian economy? Is the crop appropriate for the Indian environment? The answer to all these vital questions seems to be in the negative.


Perhaps, the most vital question is - Is palm oil healthy? The oil contains much saturated fats, though not transfats. Saturated fats lead to the production of bad cholesterol (low density lipo proteins) in the blood stream which can lead to heart diseases.




Oil palm crop is a water guzzler, and extensive oil palm plantations ruin the biodiversity. Hence, it will have a detrimental effect on the environment. Palm oil is being imported and its cultivation is promoted because it is cheap, and that is the paramount reason for its widespread use by poor and middle class Indians, for cooking. But, nothing comes free, and, in the low price of imported palm oil, what is being excluded and ignored is the massive destruction of the natural habitat that threatens the survival of nearly 200 species.


We are able to ignore the smog that periodically envelops parts of Malaysia and Singapore from burning forests. Just as the slave traders could ignore the feelings of humanity of the slaves, whose skin they polished with palm oil to sell for a profit, we are ignoring the cost of Southeast Asia’s ecosystem, which pays for cheap oil the world imports.


The proposed mass cultivation of oil palm in India will extract a ruinous cost in terms of the water table that is already declining rapidly, because the oil palm tree is a water guzzler, far worse than sugarcane. India will repeat the extensive clearing of old forests (heritage forests) and reproduce exploitative labour conditions reminiscent of the colonial era.


Indian climatic conditions are very different; thus the State will be subsidizing both the production and purchase of the oil to maintain the illusion that it is cheap. In doing so, we will be destroying the livelihoods of those engaged in traditional edible oils such as soya, mustard, groundnut, etc., and destroying the nationwide edible oil production and distribution networks that have been built with much time and effort. India is committing a grave mistake.          

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